Social and Behavioral Sciences Commons^™

Is There Deadweight Loss In Holiday Rewards?, Kevin F. Hallock

Economics Faculty Publications

An interesting and provocative study was conducted by Joel Waldfogel of the University of Minnesota some 20 years ago. He wrote "The Deadweight Loss of Christmas." Waldfogel was not only discussing Christmas but noted that the ideas could apply to other holidays with gift-giving rituals. The study noted that although gift giving is generally applauded by economists since it is a way to help the macro economy, there is another side to the story. A problem with gift giving (or non-monetary rewards) is that the gift giver often does not perfectly know the preferences of the person receiving the gift. …

Pay System Gender Neutrality, Kevin F. Hallock

Economics Faculty Publications

It was Francine Blau's "Equal Pay in the Office" (1977) that laid out some of the seminal research on gender differences in labor market outcomes. Blau and other pioneering researchers established decades ago that the gender pay gap (then around 40%) could not be ignored by academic economists. Many organizations are concerned with whether their individual pay systems are gender neutral, but it is not easy to test robustly a pay system's gender neutrality. To build such a test requires consideration of several issues, including control variables, occupational patterns, statistical specifications, and the often-overlooked difference between wage and salary income …

Nokia Siemens Networks: Just Doing Business – Or Supporting An Oppressive Regime?, Judith Schrempf-Stirling

Management Faculty Publications

This case study examines the relevance of taking social and political factors into consideration when a corporation is making a key business decision. In September 2009, Simon Beresford-Wylie, the outgoing CEO of Nokia Siemens Networks (NSN), was reviewing the company’s achievements — while acknowledging the latest public criticism regarding NSN’s business relationship with the Iranian government. In the summer of 2009, NSN was accused of complicity in human rights violations linked to Iran’s presidential election. The company sold network infrastructure and software solutions to the Iranian government, which then used this technology to observe, block, and control domestic communications. Should …

Say On Pay And Compensation Design, Kevin F. Hallock

Economics Faculty Publications

Say on pay is demanding far more time and energy than expected, and its full impact on the world won't be known for years. The 2011 proxy season was the first time publicly traded firms in the U.S. were required by law to solicit from their shareholders advisory yes or no votes on the pay package awarded to the CEO. In every industry, the median CEO received a raise (positive year-on-year change) in total CEO compensation. The mix of pay shifted some. For example, in the communications industry, the average share of total compensation paid in salary fell by 6.53 …

Linking Compensation And Job Losses During A Recession, Kevin F. Hallock

Economics Faculty Publications

For more than 60 years, no permanent Lincoln Electric employee has been laid off for lack of work. 2010 marked the 10th consecutive year year that the company increased its dividend and stock price gains have fairly consistently outperformed the S&P 500 during the past five years. For most organizations, when costs need to be cut, shedding some workers is part of the solution. Work Sharing Unemployment Insurance tries to mitigate the negative repercussions of layoffs. Under WSUI, workers are eligible for a prorated fraction of unemployment insurance benefits. Proponents of WSUI contend that hiring, firing, and retraining costs are …

Does That Pay Practice Really Have Any Impact?, Kevin F. Hallock

Economics Faculty Publications

Few organizations take the time to credibly study whether some pay, benefits, work-life balance or other total rewards practices have any impact on the organizations' bottom line or employee outcomes like productivity or turnover. It's too difficult to do well, organizations don't actually want to know the answer, and/or organizations don't have the know-how or time. One successfully executed, evidence-based study of a new compensation practice is Safelite AutoGlass. Edward Lazear compared the productivity change worker by worker, for only those employees present under both pay arrangements. Lazear found that not only did productivity increase after the change from hourly …

Dr Pepper Snapple Group: Fighting To Prosper In A Highly Competitive Market, Joseph S. Harrison

Robins Case Network

Since its separation from the food giant Cadbury Schweppes, Dr Pepper Snapple Group has experienced successes such as the turnaround of the Snapple brand and growth in demand for some of its popular brands. However, the company is still a distant third in an incredibly competitive industry. How can the company achieve continued success in the shadows of Coca Cola and PepsiCo?

Pay Ratios And Pay Inequality, Kevin F. Hallock

Economics Faculty Publications

Some argue that reporting the ratio of CEO pay to that of the median-compensated worker in the organization is useful since it highlights the sometimes large discrepancy between the pay of an average worker and that of corporate executives. One argument against reporting the ratio of CEO pay to median worker pay is that this is much more difficult to calculate in practice than in theory. The hourly earnings of workers at the bottom have been incredibly flat for the last generation. Only the top 5% have seen large gains over time. For CEOs, the gains are substantial. the multiple …

Mixed Agendas And Government Regulation Of Business: Can We Clean Up The Mess?, Tom Arnold, Jerry L. Stevens

Finance Faculty Publications

The history of regulation in the U.S. economy shows a cumulative growth of government involvement in private enterprise that has helped business at times and has been at odds with business at other times. The wavering views on how much regulation is warranted change over time and cut across political and philosophical ideologies. For example, in the first two years of President Barack Obama's administration there was a push for new and large increases in regulation of healthcare and financial markets along with intervention into public markets with massive spending to bailout automakers and financial institutions.

Now, in the second …

Monopsony And Salary Suppression: The Case Of Major League Soccer In The United States, John Twomey, James Monks

Economics Faculty Publications

Top tier professional soccer in the United States is operated by Major League Soccer (MLS). The MLS was established and operates under a single entity structure, such that all players negotiate and sign contracts with the league rather than with individual teams. This monopsonistic structure was designed to eliminate competition for players across teams within the league and thus allow the league to suppress player salaries. This paper investigates how effective the MLS has been in achieving this goal and finds that the MLS devotes only about 25 percent of its revenues to player salaries, compared to 50 to 60 …

Pay Secrecy And Relative Pay, Kevin F. Hallock

Economics Faculty Publications

In March 2008, the Sacramento Bee began publishing the salaries of all California state workers, including public universities. UC Berkeley professors took this information and used it to learn about pay secrecy, relative income, and how people feel and react to knowing what their co-workers earn. It turns out that there is a dramatic difference in the response to new information about wages of co-workers, depending on whether an individual has wage and salary pay above or below the median for his or her workgroup. For those who earn below the middle of their group, the new information about the …

Le Développement Durable Comme Mode De Prévention Des Risques Energétiques : Une Approche Par Les Capacités D’Absorption. Le Cas De La Voiture Electrique Chez Renault, Sylvaine Castellano, Adnane Maâlaoui, Judith Schrempf-Stirling

Management Faculty Publications

Sustainability — a way to prevent energy-related risks — is the buzzword of the last decade. This trend demands radical rethinking on how society lives, consumes and produces. Herein, we focus on electric cars, which is the result of sustainable processes and initiatives in the car industry. The case of Renault illustrates how the firm based its sustainable strategy on its absorptive capacities.

Motivating With Efficiency Wages And Delayed Payments, Kevin F. Hallock

Economics Faculty Publications

In the delayed payment system, companies motivate workers to work hard year after year by paying them less than the value they create for the company early in the workers' tenure and more than the value they create for the company later in the workers' tenure. With efficiency wages, workers are essentially paid a wage that is higher than the next-best offer they could get. A paper by Alan Krueger found that at company-owned fast food restaurants, employee compensation is higher and the delayed payment profile is steeper than at franchised outlets. In a recent paper, Matthew Freedman and Renata …

The Relationship Between Company Size And Ceo Pay, Kevin F. Hallock

Economics Faculty Publications

The link between the size of the company and the pay of the CEO is one that is nearly impossible to make go away. One measure of the company-size-to-CEO-pay relationship is called elasticity by economists. It turns out that we can estimate the CEO compensation elasticity with respect to firm revenue, and this number is around 0.3. That is, for a 1% increase in company size, CEO pay goes up by about one-third of 1%, or for a 10% increase in company size, CEO pay goes up by about 3%. The relationship between organization size and top executive pay in …

A Tale Of Passion: Linking Job Passion And Cognitive Engagement To Employee Work Performance, Violet Ho, Sze-Sze Wong, Chay Hoon Lee

Management Faculty Publications

We propose a model of job passion that links two types of passion, harmonious and obsessive passion, to employees’ work performance, via the mediating mechanism of cognitive engagement (comprising attention and absorption). Results from a survey conducted with 509 employees from an insurance firm indicate that employees with harmonious passion performed better at work, and that this relationship was mediated primarily by cognitive absorption, that is, the intensity of focus and immersion experienced by the employees when working. However, even though obsessive passion was negatively related to cognitive attention (i.e., the amount of cognitive resources spent thinking about work), it …

Using Real World Applications To Policy And Everyday Life To Teach Money And Banking, Dean D. Croushore

Economics Faculty Publications

Teaching a course in money and banking can be simultaneously challenging and easy. It is challenging because teaching the course well often requires a fair amount of institutional knowledge, which an instructor may not have acquired in graduate school. However, it is easy because the course can be geared to the coverage of current events, so economic data releases and the state of the economy help the instructor develop a new course every semester and produce an interesting lecture every day.

There are many different ways to teach a course on money and banking. At most schools, the only prerequisite …

The Disconnect Between Employer Costs And Employee Value, Kevin F. Hallock

Economics Faculty Publications

There is a tremendous disconnect between the cost of compensation to employers and the value employees place on that compensation. Companies pay a lot more for workers than workers see in their paychecks. The average worker in the US costs his/her employee $29.52 per hour. But only $20.50 of that appeared in the worker's paycheck as wage and salary. The other $8.96 is attributable to other employer costs that employees do not immediately see. Of the $8.96, $2.04 is for paid leave, $0.71 is for supplemental pay, $2.60 is for insurance, $1.31 is for retirement savings, and $2.30 is for …

[Introduction To] Honest Work: A Business Ethics Reader, Joanne B. Ciulla, Clancy Martin, Robert C. Solomon

Bookshelf

Revised in the aftermath of the worst global financial crisis since the Great Depression, the third edition of Honest Work: A Business Ethics Reader reflects and reinforces the editors' assertion that business ethics is primarily about the ethics of individuals. Featuring 115 brief articles and 89 real-life case studies, this unique anthology covers all aspects of business ethics under the overarching theme of the good life--what it means to students as individuals, what it means for business, and what it means for society. The book also includes an extensive chapter that explores the relationship between leadership and ethical behavior in …

[Introduction To] Propaganda State In Crisis: Soviet Ideology, Indoctrination, And Terror Under Stalin, 1927-1941, David Brandenberger

Bookshelf

The USSR is often regarded as the world's first propaganda state. Particularly under Stalin, politically charged rhetoric and imagery dominated the press, schools, and cultural forums from literature and cinema to the fine arts. Yet party propagandists were repeatedly frustrated in their efforts to promote a coherent sense of "Soviet" identity during the interwar years. This book investigates this failure to mobilize society along communist lines by probing the secrets of the party's ideological establishment and indoctrinational system. An exposé of systemic failure within Stalin's ideological establishment, Propaganda State in Crisis ultimately rewrites the history of Soviet indoctrination and mass …

When A Promotion Is Denied: The Effects Of Decision Stage On Perceptions Of Promotion And Price Fairness, Monika Kukar-Kinney, Lan Xia, Kent B. Monroe

Marketing Faculty Publications

Marketers frequently use promotions to enhance sales and increase consumers' perceptions of value. However, most promotions usually come with restrictions, such as time expiration, quantity or product model restriction, etc. In the present research, the effect of the stage in the purchase process when the consumer finds out about the restriction is investigated. The findings indicate that the later in the purchase process the consumer discovers the restriction, the greater is the perception that the effort invested into the purchase is wasted, consequently resulting in lower promotion and price fairness. This effect is mediated through the feeling of entitlement to …

Anticipating Happiness In A Future Negotiation: Anticipated Happiness, Propensity To Initiate A Negotiation, And Individual Outcomes, Dejun Tony Kong, Ece Tuncel, Judi Mclean Parks

Jepson School of Leadership Studies articles, book chapters and other publications

We examined the role of anticipated happiness in negotiation settings. Anticipated happiness is the happiness that individuals expect to experience in the future if certain events do or do not occur. In two studies, we tested the argument that anticipated happiness initiates an approach goal, leading individuals to promote economic interests. Study 1 revealed that anticipated happiness was positively related to the propensity to initiate a negotiation, mediated by an approach goal. In Study 2, we found that anticipated happiness about reaching the target value increased the individual negotiation outcome, mediated by actual target value. Our studies provide insight into …